Business Segments

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Business Segments

Note 14 – Business Segments

DPL had two reportable segments consisting of the operations of two of its wholly-owned subsidiaries, DP&L (Utility segment)and DPLER (Competitive Retail segment which included DPLER's wholly-owned subsidiary, MC Squared). This is how we viewed our business and made decisions on how to allocate resources and evaluate performance.

The Competitive Retail segment, DPLER’s competitive retail electric service business, was sold on January 1, 2016 (see Note 16 – Discontinued Operations). DPL now operates through one segment, the Utility segment. Segment disclosures for 2014 and 2013 have not been restated to show the competitive retail segment as a discontinued operation and therefore do not tie to the Statements of Operations.

The Utility segment is comprised of DP&L’s electric generation, transmission and distribution businesses which generate and deliver electricity to residential, commercial, industrial and governmental customers. DP&L generates electricity at five coal-fired electric generating stations and distributes electricity to approximately 517,000 retail customers who are located in a 6,000 square mile area of West Central Ohio. DP&L also sold electricity to DPLER and any excess energy and capacity is sold into the wholesale market. DP&L’s transmission and distribution businesses are subject to rate regulation by federal and state regulators, while its generation business is deemed competitive under Ohio law.

The Competitive Retail segment’s electric energy used to meet its sales obligations was purchased from DP&L. Intercompany sales from DP&L to DPLER were based on fixed-price contracts for each customer; the price approximated market prices for wholesale power at the inception of each customer’s contract. These agreements were terminated in connection with the sale of DPLER on January 1, 2016.

Included within the “Other” column are other businesses that do not meet the GAAP requirements for disclosure as reportable segments as well as certain corporate costs, which include interest expense on DPL’s debt. Management evaluates segment performance based on gross margin. The accounting policies of the reportable segments are the same as those described in Note 1 – Overview and Summary of Significant Accounting Policies. Intersegment sales and profits are eliminated in consolidation. Certain shared and corporate costs are allocated among reporting segments.

The following tables present financial information for each of DPL’s reportable business segments:

$ in millions	Utility		Other			Adjustments and Eliminations			DPL Consolidated
Year ended December 31, 2015
Revenues from external customers	$	1,550.8	$	62.0		$	—		$	1,612.8
Intersegment revenues	1.5		4.2			(5.7		)	—
Total revenues	1,552.3		66.2			(5.7		)	1,612.8
Fuel	244.7		15.1			—			259.8
Purchased power	555.7		8.9			(2.0		)	562.6
Gross margin(a)	$	751.9	$	42.2		$	(3.7	)	$	790.4
Depreciation and amortization	$	138.2	$	(3.6	)	$	—		$	134.6
Goodwill impairment (Note 7)	$	—	$	317.0		$	—		$	317.0
Fixed asset impairment	$	—	$	—		$	—		$	—
Interest expense	$	30.9	$	87.6		$	(0.2	)	$	118.3
Income tax expense / (benefit)	$	35.1	$	(15.1	)	$	—		$	20.0
Net income / (loss) from continuing operations	$	106.4	$	(357.8	)	$	—		$	(251.4	)
Discontinued operations, net of tax	$	—	$	12.4		$	—		$	12.4
Net income / (loss)	$	106.4	$	(345.4	)	$	—		$	(239.0	)
Cash capital expenditures	$	127.0	$	10.2		$	—		$	137.2
Total assets (end of year) (b)	$	3,365.8	$	1,314.4		$	(1,339.4	)	$	3,340.8

(a) For purposes of discussing operating results, we present and discuss gross margins. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information that is used by management to make decisions regarding our financial performance.

(b) Includes assets held for sale related to the sale of DPLER.

$ in millions	Utility		Competitive Retail		Other			Adjustments and Eliminations			DPL Consolidated
Year ended December 31, 2014
Revenues from external customers	$	1,181.2	$	533.6	$	48.2		$	—		$	1,763.0
Intersegment revenues	487.1		—		5.5			(492.6		)	—
Total revenues	1,668.3		533.6		53.7			(492.6		)	1,763.0
Fuel	314.9		—		(10.4		)	—			304.5
Purchased power	582.4		491.8		7.5			(489.1		)	592.6
Amortization of intangibles	—		—		1.2			—			1.2
Gross margin (a)	$	771.0	$	41.8	$	55.4		$	(3.5	)	$	864.7
Depreciation and amortization	$	144.8	$	0.8	$	(5.8	)	$	—		$	139.8
Goodwill impairment (Note 7)	$	—	$	—	$	135.8		$	—		$	135.8
Fixed asset impairment	$	—	$	—	$	11.5		$	—		$	11.5
Interest expense	$	33.9	$	0.5	$	92.9		$	(0.7	)	$	126.6
Income tax expense / (benefit)	$	39.7	$	2.0	$	(23.5	)	$	—		$	18.2
Net income / (loss)	$	115.0	$	3.2	$	(192.8	)	$	—		$	(74.6	)
Cash capital expenditures	$	114.2	$	2.5	$	1.4		$	—		$	118.1
Total assets (end of year)	$	3,338.7	$	94.9	$	1,440.1		$	(1,295.9	)	$	3,577.8

(a) For purposes of discussing operating results, we present and discuss gross margins. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information that is used by management to make decisions regarding our financial performance.

$ in millions	Utility		Competitive Retail		Other			Adjustments and Eliminations			DPL Consolidated
Year ended December 31, 2013
Revenues from external customers	$	1,098.2	$	511.6	$	27.1		$	—		$	1,636.9
Intersegment revenues	453.3		—		4.0			(457.3		)	—
Total revenues	1,551.5		511.6		31.1			(457.3		)	1,636.9
Fuel	362.5		—		4.2			—			366.7
Purchased power	381.9		459.7		1.1			(453.7		)	389.0
Amortization of intangibles	—		—		7.1			—			7.1
Gross margin (a)	$	807.1	$	51.9	$	18.7		$	(3.6	)	$	874.1
Depreciation and amortization	$	140.2	$	0.6	$	(7.9	)	$	—		$	132.9
Goodwill impairment (Note 7)	$	—	$	—	$	306.3		$	—		$	306.3
Fixed asset impairment	$	86.0	$	—	$	(59.8	)	$	—		$	26.2
Interest expense	$	37.2	$	0.5	$	86.9		$	(0.6	)	$	124.0
Income tax expense / (benefit)	$	18.6	$	4.2	$	(0.5	)	$	—		$	22.3
Net income / (loss)	$	83.6	$	6.6	$	(312.2	)	$	—		$	(222.0	)
					$	—
Cash capital expenditures	$	122.1	$	—	$	2.3		$	—		$	124.4
Total assets (end of year)	$	3,313.1	$	105.0	$	1,675.8		$	(1,372.4	)	$	3,721.5

(a) For purposes of discussing operating results, we present and discuss gross margins. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information that is used by management to make decisions regarding our financial performance.